Massachusetts Finds Long-Term Contract Mandate Premature

The Massachusetts Department of Public Utilities found it’s unnecessary at the current time to require electric utilities to enter long-term contracts for power supply to address forecasts of insufficient peak-load requirements in the state. The department said that requiring electric distribution companies to enter into long-term contracts with generators would be proper only if there was convincing evidence that the competitive market has failed and that there are imminent reliability concerns. Under state law, the department is charged with investigating the need for additional capacity in the Northeastern Massachusetts and Greater Boston (NEMA/Boston) region within the next 10 years. The department said it believes that “the wholesale market should be given the opportunity to work before taking the extraordinary step of ordering local distribution companies to enter into long-term contracts” as contemplated under state law. Re Additional Capacity in NEMA/Boston, D.P.U. 12-77, Mar. 15, 2013 (Mass.D.P.U.). For more analysis, subscribe to URN.